America’s Industrial Expansion period of the 1800’s left a legacy for the modern world today. This legacy not only included new types of industry and business techniques, but also included a list of notable and impactful individuals who contributed to America’s industrial empire.
Among this list of individuals is John Pierpont Morgan. Born in Hartford, Connecticut on April 17, 1837, J.P Morgan was introduced to the banking industry at an early age. His father, Junius Morgan ran a widely, successful banking business in which J.P Morgan would eventually inherit. To prepare his son for this responsibility, Junius Morgan ensured J.P.’s education by sending him to the English High School of Boston, a strong institution specializing in business mathematics. Later, J.P. Morgan would attend Germany’s prodigious University of Göttingen.
After working at Peabody, Morgan and Company (his father’s London banking branch) and gaining experience as an accountant, J.P. Morgan relocated to J.S. Morgan & Co’s American branch in New York City. Here, he became an representative for his father’s firm. In 1864, J.P. Morgan’s assiduous determination paid off, as he became an member of great influence at Dabney, Morgan and Co. Soon, in 1871, he struck a partnership with the distinguished Philadelphian Drexels to form the new firm of Drexel, Morgan & Co. This firm was later renamed J.P. Morgan & Co. and recognized as the most prestigious and influential institutions of finance in the world that executed numerous consolidations and reorganization. As America’s Industrial Expansion period hit it’s peak, J.P. Morgan established himself as a top banker and financier.
J.P. Morgan took advantage of an eclectic range of business strategies to rise in power. These tactics included “morganization”, vertical consolidation, and gambles of investment. “Morganization” was a moniker used to describe J.P. Morgan’s process in which he stabilized shaky businesses. Through a reorganization of business management and infrastructure, J.P. Morgan returned many failing businesses to profitability.
Vertical consolidation, the acquisition of different services or facilities that lead to an overall product, was used as well by Morgan. After the Civil War, many small railroad companies faced difficult times. Immediately, J.P. Morgan recognized these opportunities and bought out the nascent companies. By 1900, he controlled a major portion of railroad assets and, overall, held an approximate one-sixth of American railroads. With such a large amount of railroads at his disposal, J.P Morgan started to vertically consolidate. Knowing that railroads and train industry called for large amounts of steel, J.P. Morgan began purchasing many steel-making businesses. Basically, Morgan’s rail companies and steel providers were owned by the same entity, thus lowering production costs. To put this in perspective, J.P. Morgan, in 1901, founded the United States Steel Company by establishing a merger...